The Super-Rich Are Growing in Numbers: What Does It Now Mean to Be Wealthy?

For most people, $30 million is an unimaginable fortune. However, for the ultra-high-net-worth individuals (UHNWIs), it's becoming increasingly ordinary.

According to Capgemini data, the number of people with assets exceeding $30 million, the typical threshold for UHNWIs, surged from 157,000 in 2016 to 220,000 in 2023. That marks an impressive rise of nearly 28% over just seven years.

As the ranks of these multi-millionaires continue to swell, with many splurging on luxury yachts and fine art, the definition of what it means to be "rich" is shifting dramatically, pushing the financial bar even higher.

Elias Genem, global head of Capgemini's Financial Services Research Institute, told Fortune that a significant portion of today’s young self-made UHNWIs built their fortunes through entrepreneurship and executive roles in the technology sector. "Many of today's young self-made UHNWIs built their wealth primarily through entrepreneurship or executive roles in technology," Genem noted.

This ever-increasing number of UHNWIs raises questions about how their wealth impacts their behaviors and priorities. Genem explained that UHNWIs tend to be "primarily focused on wealth growth," whereas the rest of the high-net-worth population leans toward wealth preservation. UHNWIs possess the ability to endure short-term market fluctuations, thanks to their "long-term investment horizons and substantial discretionary wealth," he added.

Consequently, they exhibit a higher tolerance for risk.

Inflation, undeniably, has contributed to the growth in the number of multi-millionaires, though it has also made that status more difficult to achieve. Additionally, the explosion of wealth-building opportunities in sectors such as cryptocurrency, startups, and technology has accelerated the creation of wealth for those positioned to capitalize on these trends.

Capgemini data reveals that the number of UHNWIs in North America increased by 7.3% in the past year. Genem attributed this growth to several factors, including "economic resilience, easing inflationary pressures, and a rally in the U.S. stock market." He also noted that a "flurry" of U.S. government-led initiatives aimed at boosting domestic manufacturing has contributed to capital growth.

The ever-evolving parameters of wealth mean that $30 million is now viewed as the starting point rather than the ultimate marker of success among the wealthy. David Gibson Moore, president of consultancy Gulf Analytica, told the Financial Times, "Today's ultra-rich are being measured by new standards, with some financial commentators now suggesting that $100 million is the new benchmark for anyone looking to hold their head high at private equity parties."

The Knight Frank Wealth Report 2024 echoes this trend, citing the robust performance of the U.S. economy and the significant rise in equity markets as key factors driving global wealth creation. The report noted a 4.2% increase in the number of UHNWIs globally by the end of 2023, bringing the total to just over 626,600. While North America led this surge, Europe remains home to the world's wealthiest 1%, according to the report. Despite the growing number of wealthy individuals, wealth segregation has never been more challenging, with some experts asserting that it now takes assets of $50 to $100 million to truly belong to the elite club.

Looking ahead, Knight Frank predicts the number of UHNWIs worldwide will rise by around 28% over the next four years. However, this pace of growth is expected to be "significantly slower" than in the preceding five-year period, from 2018 to 2023. Nevertheless, this expanding pool of affluent individuals is promising for industries like real estate. As Knight Frank stated, "Nearly a fifth of UHNWIs plan to invest in commercial property this year, while more than a fifth plan to buy homes." This growth is set to offer a range of opportunities, especially for developers who can meet the evolving preferences of this demographic.

Additionally, Capgemini research shows that nearly all UHNWIs (91%) are drawn to passion investments, which include luxury real estate, art, wine, and other collectibles. This growing appetite for luxury properties has also pushed real estate advice into the top five services UHNWIs seek when choosing wealth management firms. "The growing appetite for luxury second homes has pushed real estate advice into the top five service requirements of UHNWIs when deciding to choose a wealth management company," Ganem added.

As the number of super-rich continues to rise, so too does the definition of wealth itself, making it increasingly clear that $30 million is only the beginning. 

By fLEXI tEAM